Rental income

starM

HI,

I have seen a property which I want to buy and then rent it out. I was thinking for a joint mortgage because my wife is housewife so when we register Self Assessment she wouldnt have to pay any tax because of her personal allwance up to £6400 I think.

Now I have heard of Tenancy in common - Can I take a mortgage only in my name and arrange tenancy in common in both our names?

Also will this allow my partner to have higher share e.g. 80% her and 20% mine? By this way 80% of rental income will be declared on her SA and only 20% on my my return.

Will I have to let HMRC know about this?

Thanks
MS

chewmylegoff

seek professional advice - or you could do worse that just ringing HMRC up and explaining what you intend to do and ask them if it's legit. i've done this a few times in the past and found them to be pretty useful.

theartfullodger

I understand HMRC if pressed will asses the split of income on the basis of the split of money put in (deposit) and payments to the mortgage. (Sounds fair?).

So assuming she puts in 80% deposit & mortgage payments that should be fine. Anything else would sound fraudulent under any inspection...., I fear..

Cheers & Best wishes to you both in the property renting game. 100+ laws to worry about...

Lodger

starM

mmm interesting article here on Tax Saving Ideas for Joint Buy-to-Let Owners

http://www.taxexpert.co.uk/property_tax/buy_to_let.php

tbs624

starM wrote: »

....Now I have heard of Tenancy in common - Can I take a mortgage only in my name and arrange tenancy in common in both our names?

Also will this allow my partner to have higher share e.g. 80% her and 20% mine? By this way 80% of rental income will be declared on her SA and only 20% on my my return.

You and your wife would have to own the property in those shares to be able to allocate the rental income that way. The mortgage should be in both names.

starM wrote: »

Will I have to let HMRC know about this?..

If a property is jointly owned then HMRC assume a 50% share to each party. For it to be otherwise you would have to provide proof that the property was owned on an alternative split and complete Form 17

socrates

starM wrote: »

mmm interesting article here on Tax Saving Ideas for Joint Buy-to-Let Owners

http://www.taxexpert.co.uk/property_tax/buy_to_let.php

May 2006 - is it out of date, a loophole that has been closed?

N79

There are many ways to avoid paying income tax on rental income. The method you suggest is not one of them.

A good accountant will be able to advise on how to avoid a tax liability.